Aluminum prices have dropped to their lowest point in nearly three months, largely attributed to an interim US-Iran peace deal that has eased concerns over supply disruptions from the Middle East. The London Metal Exchange (LME) cash aluminum bid price fell to $3,263 per metric ton on June 23, a 4.11% decrease from $3,403 per ton the previous day. Similarly, the benchmark three-month aluminum contract saw its bid price decline to $3,269 per ton, a 3.99% fall from $3,405 per ton, with the Asian benchmark also reflecting this weakness at $3,232.50 per ton.
The metal is on track for its fourth consecutive weekly decline, the longest losing streak since April 2025, and is facing its steepest monthly loss since October 2008, down 15.4% for June. This significant downturn follows an earlier surge induced by the Iran war, which had raised fears of widespread smelter shutdowns and prices exceeding $4,000 a ton due to supply shocks and potential closures of the Strait of Hormuz. However, the anticipated crisis was blunted by record exports from China and efforts to maintain alumina reserves through daring voyages.
The strengthening US dollar, which has reached its highest level in 13 months, has also contributed to aluminum's decline by making it more expensive for international buyers. This dollar appreciation is driven by a tech stock selloff and expectations of continued high interest rates from the Federal Reserve to combat inflation. Analyst Peng Dinggui from Zhongtai Futures Co. noted that "Ex-China premiums dropped rapidly following the news of truce deals, signaling supplies are not that tight any more," adding that the rapid price plunge has caused "a bit panic in the market" among some Chinese investors expecting further drops.
